The Benefits and Risks of the JD Shopify Partnership for E-Commerce Merchants

The new Shopify and JD.com partnership is exciting news for Shopify merchants.  The partnership deal makes the challenges of selling goods to the Chinese market much easier.

Shopify merchants can add the official JD.com app from the Shopify Marketplace and begin selling to Chinese customers in under four weeks.

Here is what you need to know to get started selling on JD.com:

jd-shopify-partnership

1) What is JD.com?

JD (Jingdong) is one of the largest e-commerce marketplaces in China with 550 million active customers. JD runs a warehouse fulfillment network similar to Amazon Prime FBA (fulfillment by Amazon) that includes over 500 warehouses and 7000 delivery stations spread across China. 

In 2016, JD.com launched "JD Plus" premium membership which functions similar to Amazon Prime and includes free shipping plus members benefits.

The key difference between JD.com and Amazon.com is JD's focus on last-mile logistics. JD delivers the package to consumers' residences, whereas Amazon relies on third-party logistic providers.

jd-company-size

2) What is Shopify?

Shopify runs the world’s largest e-commerce platform with over  1.6 Million merchants including individuals, startups, and large retailers that sell physical goods to consumers online. Shopify’s e-commerce platform allows you to launch, advertise, manage and grow an online store to sell physical products.

Shopify platform features include website builder, hosting, payment processing, shipping services and provides a website, hosting,  payment processing, shipping services, and an Apps marketplace with over 6000 apps to easily add features to your store.

Shopify-online-store

3) How does the JD Shopify Partnership benefit merchants?

The current process for North American merchants to sell in China is challenging. It can take over 6 months to complete the JD.com onboarding process and require significant legal, logistic, and translation costs. 

The new JD-Shopify partnership aims to speed up the JD on-boarding time to four weeks. 

Key benefits of the partnership for North American Shopify stores include:

  • Automated store creation plus content translation
  • Automated Price Conversion
  • No setup or recurring fees
  • Access to JD Worldwide (JK.hk) Platform with 500,000 active customers
  • Ship products direct to JD.com California warehouse (No China customs/duties challenges)
  • Simplify the process for  importing goods to China:
    • Sellers will ship goods to the California JD warehouse, where JD cargo flights will move the goods from US to China
  • Access to JD Sourcing:
    • North American sellers can add existing products sold on JD.com to their Shopify stores and JD will drop ship them to customers

Note: At this time your Shopify business must be registered in the United States to use the Shopify/JD.com partnership.

shopify-jd-partnership

4) Three Ways to Start Selling on JD.com

JD.com has three partnership models for companies to sell goods on the JD platform including:

  1. Direct Sales: (Global brands with presence in China)
  2. Marketplace: (Shopify Partnership)
  3. Worldwide: (Global brands outside of China)

The first step to selling on JD.com is deciding which partnership model works best for you. The chart below compares each of the partnership models to help you decide which is best.

Partnership ModelRequirementsTimeLine to LaunchType of CompanyFee + Payment
Direct SalesExisting China Business Operations
Products Already Inside China
China Trademark Registration Certificate
Bank Account in China
Pass JD.com Application Process
All Product Info and Customer Service in Chinese
3 - 6 Months +Established Global Brands
Existing Business Operations in China
Manufacture Product in China
Payment to China Bank
Annual $1K USD Fee
15K-30K USD Deposit Sales
Commission: 2 - 8 %
Product Sale Fee Formula:
(Price + Logistics Fee) * commission%
Marketplace (Shopify Intergration)Local Country Business License
USD Bank Accounts
Proof of Product Ownership (Brand Trademark)
3 - 4 WeeksShopify Merchants
Hardware Startups
Small Consumer Product Brands
No access to Chinese Translation
Payment to USD Bank
Free to Register/Apply
No Recurring Fees Sales
Commission: 2 - 8%
Fee Formula:
(Price + Logistics) * Commission
WorldwideInternational Brand (Not Startup)
USD Bank Account
Proof of Brand Ownership
Brand Not Launched in China
All Product Web Descriptions and Customer Service in Chinese
3 - 6 Months +Global Brands
No Existing Presence in China
Payment to US Bank
Annual $1K USD Fee
15K-30K USD Deposit Sales
Commission: 2 - 8 %
Product Sale Fee Formula:
(Price + Logistics Fee) * commission%

Note: Full details on each of these partnership models can be found on JD.com/partners


5) What are the risks of joining JD through the Shopify Partnership?

The ease of setup on the JD.com network for Shopify sellers does not take away the existing legal risks of entering the Chinese market. To be successful in the long-run, Shopify merchants still need a strong legal footing to navigate intellectual property and business risks.

Tainpeng Wang, CEO of China legal services marketplace Trustiics, put together an article on the major risks the JD-Shopify partnership sellers will face entering the Chinese market. The three risks sellers must be aware of include:

  • Existing Trademark Registration by Chinese Company:
    • Use a Chinese lawyer to check whether an existing China-based company has registered any of the trademarks tied to your brand. Worst case - a third-party can stop you from using your own brand name
  • Protect Your Brand by Filing File Trademark Application:
    • China adopts the same system of trademark classifications US, Canada, EU etc.
    • To protect your brand from being copied, it’s critical to file trademark applications when entering the Chinese market
  • Taking Legal Action on Trademark Infringement:
    • If you discover a trademark application by a third party for your brand you need to take legal action to oppose or invalidate the filings

 If you are pursuing entry into the Chinese market, it’s always helpful to contact a Chinese business lawyer to understand what risks you face. The market opportunity in China for North American sellers is large but so are the risks.

china-legal-risks

6) How to sell on JD.com using Shopify?

Selling on JD.com using the Shopify App called "JD Marketplace" is easy. The best part? It's free.

Here are the steps to get started:

  1. Login into your Shopify store, go to the Apps marketplace
  2. Search for "JD Marketplace"
  3. Install the App and the follow the application steps

Note: The JD Marketplace App is only available to Shopify merchants who have an address in the United States. If your business is in another country, you will need to apply using one of the other JD.com partnership models

Video: How to connect Shopify to JD.com Markplace


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